A higher stake on Indian market-18/10/10

A higher stake on Indian market-18/10/10

Global power equipment major Alstom is sharpening its focus on the Indian power market as the government focuses on facilitating domestic manufacturing capacity for power equipment. India’s electricity requirement is projected to grow at a sustained pace over the long term as the economy remains on a high growth trajectory. This offers huge business potential for a company like Alstom, which provides complete power plant solutions.


The French company has been manufacturing and supplying high-duty boilers for power plants across the world. However, it had limited itself in India to providing design and engineering for turbines.


“Alstom has been operating in the Indian market for the last hundred years. However, it was not in the business of manufacturing turbines,” Guy Chardon, senior vice-president, Alstom Power, told FE, on a recent visit to India.


But when the Indian government formulated a supercritical policy in 2009 to promote indigenous power equipment capacity, Alstom was quick to reposition itself as a supplier of turbines by forging a joint venture (JV) with Bharat Forge, a global leader in forgings.

“We have to fit with the policies of the government,” Chardon said.


The Alstom-Bharat Forge JV has emerged as the lowest bidder for NTPC’s contract for the bulk supply of 660 mw supercritical turbine-generators, beating competition from Bhel and a JSW-Toshiba consortium. This should help Alstom establish itself in the Indian supercritical turbine-generator market.


Alstom holds a majority stake in the JV, which is setting up turbine-generator manufacturing facility of 5,000 mw a year in Mundra, Gujarat.


“We have brought the right technology and made the right investment in the JV. Bharat Forge brings on the table knowledge of the market and knowledge of metallurgy and forgings,” Chardon said.


“NTPC is one of the best thermal power generators in the world. The fact that the JV has come out as the lowest bidder for NTPC’s project proves that we are very competitive,” Chardon argued.


“We want the JV to become a leading player in India. We have provided people to build and run the manufacturing facility and will also provide it all the technological know-how and know-why required to make that happen,” Chardon said.


Alstom is pursuing its boiler supply business in India through Bhel. It has licensed its boiler manufacturing technology to Bhel under a 15-year agreement.


Alstom supplies key components of boilers to Bhel from its manufacturing facility in Durgapur, West Bengal. Besides, Alstom is also entitled to a royalty on the licensed technology.


Power plants are very complex. Buying equipment is not like any other products. The plant design and specifications have to match with the quality of key physical inputs like coal and water. Alstom’s competitive edge lies in the fact that it is a total plant solution provider, and not just an equipment supplier.


While Alstom does equipment supply for coal and gas-based power projects through Bhel, it has been bidding for equipment supply for hydropower projects on its own. It is implementing India’s largest hydropower project, Lower Subansiri in Arunachal Pradesh, for NHPC.


The company also provides its services for the renovation and modernisation of ageing power plants through its JV with NTPC.


Alstom has partnered with IT services major Infosys to set up an R&D centre at Bangalore, which would provide engineering solutions. Application of these innovations help increase life and efficiency of mechanical components in power plants.


The French multinational has 4,000 people working at its manufacturing plants and R&D centres in places like Vadodra, Dugapur and Bangalore.


Alstom can expand its manufacturing facility in India on requirement. “Once you have a base, you can also expand,”Chardon reasoned. Alstom will complete hundred years of its India operations in early 2011.


Multi Page Format